Elliman’s record 195% revenue jump, $43M profit just the beginning: Lorber
“Real estate has always done well in inflationary environments” said the brokerage’s executive chairman
Douglas Elliman reported record revenues and profits Thursday and executive chairman Howard Lorber forecast more to come.
“I don’t necessarily feel that we’ve increased to the highest point,” he told analysts during the second-quarter earnings call for Elliman’s parent company, Vector Group.
The brokerage notched $392 million in revenue for the quarter, nearly triple the $133 million from a year ago. Its net income was $43.2 million, up from a net loss of $5 million.
The results come as housing prices across the country continue to push up and the pace of sales begins to drop. But Lorber sees active homebuying ahead.
“Right now, where it seems that mortgage rates and interest rates are going to be kept at historically low numbers and money is being put into the economy quite heavily, I think we’re in for pretty good times over the next few years,” said Lorber.
“Real estate has always done well in inflationary environments, and especially when interest rates stay low. So I’m pretty bullish,” he continued. Predictions vary about whether recent jumps in inflation will continue, but many economists believe they are temporary.
Elliman’s closed sales volume for the quarter was $14.5 billion, up $9.8 billion from the same period last year. Lorber said activity was driven by “continued momentum” in all of its markets, though he highlighted the South Florida region and New York City in particular.
Including Vector businesses besides Elliman, the company’s quarterly revenue jumped 64 percent to $729.5 million. The holding company, a tobacco operation, reported net income of $93.3 million, up from $67.5 million a year ago.
Cost of sales for both real estate and tobacco segments totalled about $500 million. Additional operating expenses, defined as “operating, selling, administrative and general expenses,” accounted for an additional $92 million in spending.
Elliman’s expenses are not broken down, but Lorber noted that the firm discontinued some of the cost-saving measures put into place last year during the pandemic’s early months. Spending that is back on the table includes advertising and discretionary compensation.
Vector’s real estate segment, which includes new development arm New Valley and venture division, reported $400 million in revenue, up from $133.3 million. The real estate business earned a profit of $39.4 million, compared to a $12.4 million loss a year ago.
By noon Thursday, Vector’s share price had jumped more than 8.5 percent from the morning’s open.